A high sensitivity, small size, low-power consumption, broad bandwidth magnetometer having a thin film magnetoresistive (MR) element formed in a gap defined by a pair of thin film laminated flux collectors is disclosed in U.S. Ser. No. 737,755 filed Jul. 30, 1991 by N. Smith and F. Jeffers, now U.S. Pat. No. 5,119,025. Although this thin film sensor represented a marked improvement over prior art magnetometers, the design was found to suffer from several drawbacks: A nonzero temperature coefficient of resistivity for the NiFe MR film makes low frequency temperature fluctuations appear as unwanted noise signals. An external temperature sensitive resistor is generally used to help compensate for this unwanted noise signal, but such compensation cannot be complete because the thermal coupling between the resistor and the MR element is in practice inadequate. It is further difficult to control overlap of the relatively thick film flux collectors with the thin MR sensor and also difficult to etch the gap in the flux collectors without damaging the MR film. It has also been found that the magnetic state of the MR element may often be multidomain with accompanying domain walls. Such domain walls act as a source of hysteresis and Barkhausen noise when subjecting the magnetometer to sufficiently large magnetic fields.